Dell rebounding in the workstation market, but HP remains tight on its heels

Posted: 09.10.07

TIBURON, Calif—September 10, 2007—If you think the workstation is some last-century relic whose fortunes in the market have long since faded, think again. As Jon Peddie Research again finds with its Q2'07 tabulations, the workstation market is more than simply surviving, it's prospering.

Setting another high (by JPR records), Q2'07 saw a total of 718,000 branded workstations shipped, representing robust 17.1% year-to-year growth. Revenue was up to $1.7 billion, delivering a slightly more modest 15.8% increase, as ASPs took a 3.4% (sequential) drop.

The close-tracking market for professional graphics also hit another high, with sales of 931.9 thousand units accounting for $300.3 million (street value). Nvidia again took the lion's share with 79% of total workstation-class units (including add-in cards and mobile GPUs) and 88% of revenue (street value of add-in cards).

Dell has risen off its bottom and still #1, though HP not ceding ground

Dell's once dominant lead in workstations had slipped, from 46% in Q3'04 down to a low of 38.7% in Q1'06. HP meanwhile had found its stride, slowly but steadily gaining ground, from 26.7% to 28.8% over the same period. Combine Dell's turn down with HP's turn up, and HP had narrowed the gap to the #1 vendor significantly, trailing by around 10% in Q1'06, compared to about 19% in Q1'05.

Dell not only stabilized share but added a few points starting in mid'06, thanks in part to Intel's revitalized Core and (especially) Xeon platform. But Dell taking share didn't mean HP was losing it. Far from it.

While Dell has rebounded up from that 38.7% low up to 42.4% in Q2'07, HP has added roughly the same number of percentage points, up from 28.8% to 32.1% in the same period. So despite its improving performance, Dell hasn't widened its gap on HP. Trailing by only 10 percentage points, HP is as tight on Dell's heels as ever.

AMD well off its highest penetration, and Barcelona likely not the savior it could have been

AMD's share of the overall workstation platform has never been big, topping out at 3.6% in Q2'06. But looking back to the end of '05, there appeared to be no end in sight for its penetration, as it was sustaining a huge growth rate, and every OEM save Dell was shipping an Opteron workstation.

Times change. Q1'07 saw AMD take a tumble, dropping to 2.0%. And now, it's essentially down to two major OEMs, HP and Sun. IBM has recently discontinued its Opteron workstation, and Fujitsu-Siemens' shipments are at a trickle. Fortunately for the #2 platform supplier, Q2'07 hasn't shown further deterioration, with Opteron holding onto 2.1%.

Being late with its impending “native” quad-core Barcelona certainly hasn't helped AMD's cause. A six month schedule hit for its first quad-core part means that within just weeks of its arrival, Intel should be delivering its second generation quad-core as part of its 45 nm Penryn family rollout. Holding onto sockets has been tough lately for AMD. Even if Barcelona delivers on the higher end of the company's expectations, stealing back sockets with Penryn so close on the horizon will be anything but easy.